Natalie Dellinger sued Science Applications International Corporation for retaliation under the FLSA.  She alleged that the company refused to hire her after it learned that she had sued her former employer, CACI, Inc., under the FLSA’s wage and overtime provisions.  Dellinger charged that Science Applications’s motive for withdrawing its previous job offer was retaliation for her exercising her protected right to file an FLSA lawsuit. 

The district court dismissed Dellinger’s suit, finding that the FLSA’s anti-retaliation provision protects only employees and not prospective employees.  The Fourth Circuit agreed, stating the following:

Although [Dellinger] was an applicant for employment with Science Applications, and her application had been approved on a contingent basis, she never began work.  Section 203(g) provides that “employ” means “suffer or permit to work.”  Therefore an applicant who never began or performed any work could not, by the language of the FLSA, be an “employee.” 

To bolster her case, Dellinger argued that the FLSA makes it unlawful for “any person” to retaliate against any employee, and that because Science Applications is a “person,” it is prohibited from retaliating.  The Fourth Circuit disagreed – an employee may only sue employers for retaliation as explicitly defined in Section 216(b) of the FLSA.  The provision addressing “persons” in the FLSA prohibits other acts separate from retaliation – transporting goods, for example, produced by employees who are paid in violation of the Act. 

The Court also noted that the FLSA was intended primarily as a minimum wage and maximum hour law, with the anti-retaliation provision as a subpart of that broad paradigm – not as a free-standing protection.  The employment relationship is inherent to the purpose of the entire law and its substantive provisions. 

Dellinger finally urged the Court to extend the FLSA’s definition of employee to protect job applicants, relying on other statutes that protect potential employees – the Energy Reorganization Act, the National Labor Relations Act, the Occupational Safety and Health Act, and the Pipeline Safety Improvement Act.  The Court differentiated the terms and definitions in the FLSA from the named statutes, and it concluded that the text and purpose of the FLSA tie closely to the employment relationship, not authorizing prospective employees to bring civil action against prospective employers.   The dissent, however, would have adopted Dellinger’s position.

A complete copy of the opinion can be found here.  Dellinger’s attorney has indicated that a petition for rehearing en banc will be filed with the 4th Circuit.

The Court of Appeals began its opinion with the following:

Appellant challenges the grant of summary judgment for her employer when her boss forcibly kissed her, fondled her leg, propositioned her, asked sexually explicit questions, described sexual activities he wished to perform, and then, after she spurned the advances and filed a harassment complaint, fired her.

The District Court granted summary judgment for the City of Baltimore, finding that the conduct of which the plaintiff complained did not constitute a hostile work environment.  It also found that the plaintiff had performance issues, and the City had legitimate reasons for firing her.  Finally, the District Court found that the plaintiff had only made a general complaint, and it did not constitute protected activity for a Title VII retaliation claim. 

The Fourth Circuit disagreed with the District Court’s analysis.  First, the Fourth Circuit concluded that the plaintiff had presented a strong claim of a hostile work environment because of the frequency and severity of the discriminatory conduct – the alleged sexual advances were physical in nature and numerous.  The Court also found evidence that the alleged sexual advances interfered with and impacted the plaintiff’s work. 

Second, the Fourth Circuit concluded that there were factual disagreements between the parties regarding whether the plaintiff had experienced quid pro quo discrimination.  In a burden shifting framework, a plaintiff has to prove that she belongs to a protected group, that she was subject to unwelcome sexual harassment, that the harassment was based on sex, that the her reaction to the harassment effected tangible aspects of compensation, terms, conditions, or privileges of employment, and that the employer should have known about the harassment.  Subsequently, the employer must provide a legitimate, nondiscriminatory reason for its action.  Finally, the employee must show that the employer’s proferred reasoning is pretext for discrimination.  Here, the Court found enough factual disputes regarding the plaintiff’s performance to overturn summary judgment.

Third, on the plaintiff’s retaliation claim, the Fourth Circuit disagreed with the District Court on whether the plaintiff’s complaints constituted protected activity under Title VII.  It found that the City would have known by the context of the plaintiff’s emails that she was complaining about sexual harassment.  The Court also did not believe the defendant’s argument that it intended to fire the plaintiff before it received her complaints of harassment. 

A complete copy of the opinion can be found here. 

The plaintiff had brought unpaid wage and overtime claims against the defendants in the amount of $50,000.  The defendants made an offer of judgment which the plaintiff accepted, and the court entered judgment against the defendants in the amount of $50,000, plus reasonable attorneys’ fees and costs incurred through the date of the judgment.  The plaintiff originally sought attorneys’ fees and costs in the amount of $34,607.13.  The plaintiff subsequently moved to reduce the fees by ten percent, which represented the amount of discovery sanctions imposed upon the defendants.  The defendants opposed the fee petition on the grounds that certain hours expended were related to the prosecution of the case against other defendants. 

The court began its analysis by laying out the factors used to determine what constitutes “reasonable” attorneys’ fees in the Fourth Circuit:  (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney’s opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney’s expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorney’s fees awards in similar cases.

The court stated that the most critical factor in determining the reasonableness of an award is the degree of success obtained by the plaintiff, and that the award could be reduced to account for that amount of success.  Here, the court found that the majority of the factors weighed in favor of the plaintiff, noting that with respect to the customary fee charged for similar work, the rate charged by the plaintiff’s counsel was “reasonable or even low” for an attorney with that amount of expertise and experience.  Further, the court found that the rates were at or below the rates set forth in the Laffey Matrix used in Washington, D.C.  Similarly, the court found that the hours expended were reasonable and perhaps even low given the nature of the tasks involved.

The EEOC brought suit against Fairbrook Medical Clinic (“Fairbrook”) on behalf of a female physician, Dr. Deborah Waechter, who alleged she was subject to a hostile work environment by her supervisor and sole owner of Fairbrook, Dr. John Kessel.  Waechter alleged that Kessel made sexual comments and told crude jokes at work, ultimately driving Waechter to resign her employment.  The district court found that Kessel’s conduct was not sufficiently severe or pervasive to constitute a hostile work environment and granted Fairbrook’s motion for summary judgment. 

On appeal to the Fourth Circuit, Fairbrook argued that Kessel’s comments were not based on Waechter’s sex; instead, Fairbrook argued that Kessel made vulgar comments to both men and women equally.  The court stated that although Kessel made offensive comments to male and female employees, Kessel’s use of “sex-specific and derogatory terms indicate[d] that he intended to demean women.”  Therefore, the court determined that the nature of the remarks was such that a jury could conclude that Kessel’s comments were “based on sex.” 

Next, the court analyzed the “severe and pervasive” prong of the prima facie case.  The court stated that in order to be actionable, “sexual harassment must be objectively hostile or abusive, and the victim must subjectively perceive it as such.”  The objective part of the inquiry must be “judged from the perspective of a reasonable person in the plaintiff’s position, considering all the circumstances.”  Fairbrook argued that Kessel’s conduct, when viewed in the context in which it occurred, was not sufficiently severe to be actionable under Title VII; instead, it was merely the type of crude and vulgar behavior that is sometimes part of certain workplace environments.  The court disagreed, stating that Kessel’s comments were of a highly personalized nature aimed at demeaning and ridiculing Waechter.  The court held that “[w]hen assessing the severity of Kessel’s conduct, a jury could give significant weight to the intensely personal nature of this interaction.” 

The court also found significant the fact that Kessel was Waechter’s immediate supervisor and also the sole owner of Fairbrook, which meant that he had authority over Waechter on a daily basis and the ability to influence her career.  The court further concluded that the fact that Waechter may have made occasional off-color remarks herself did not negate her claim. 

Fairbrook also argued that Kessel’s conduct was not sufficiently severe because Waechter did not miss work and was not otherwise adversely affected by Kessel’s conduct.  The court stated that while relevant, these factors were not decisive.  “The critical inquiry is not whether work has been impaired, but whether working conditions have been discriminatorily altered.”  The court found that a jury could conclude that Waechter’s working conditions were altered by Kessel’s conduct. 

The court likewise dismissed Fairbrook’s argument that the absence of inappropriate touching or sexual advances by Kessel deemed his conduct not sufficiently severe or pervasive.  The court stated that “[a] work environment consumed by remarks that intimidate, ridicule, and maliciously demean the status of women can create an environment that is as hostile as an environment that contains unwanted sexual advances.”  Accordingly, the court concluded that the EEOC had proffered sufficient evidence from which a jury could conclude that Kessel’s conduct was severe or pervasive enough to constitute a hostile work environment, as well as sufficient evidence to raise a triable issue of fact as to whether Fairbrook “exercised reasonable care to prevent and correct promptly any sexually harassing behavior.”

The plaintiff, Deborah Merritt, had been employed by Old Dominion as a Line Haul truck driver.  After some time, Merritt expressed interest in a Pickup and Delivery driver position where she would have a more regular work schedule.  Merritt satisfactorily performed the duties of the Pickup and Delivery position in May 2002 when she filled in for other Pickup and Delivery drivers.  When a position opened up in the Lynchburg, Virginia terminal, Merritt expressed interest in the position to the terminal manager, who told Merritt that he lacked hiring authority.  Nevertheless, the manager later hired a male driver for the position who had less experience than Merritt.  The following year, Merritt again expressed interest in a Pickup and Delivery position when another position became available in Lynchburg.  The manager nevertheless hired a male driver for the position.  When Merritt confronted the manager about why she had not been hired, she was told that a woman could not have that position. 

In 2004, Merritt was finally offered a Pickup and Delivery driver position in Lynchburg subject to a ninety-day probationary period.  For about seven months, Merritt satisfactorily performed the duties of the position, never receiving any complaints from supervisors or customers.  Near the end of September 2004, Merritt injured her ankle on the job.  Merritt was subsequently placed on light duty by her doctor for approximately three months.  Near the end of the three-month period, Brian Stoddard, Vice President of Safety and Personnel for Old Dominion, scheduled Merritt for a fitness test to determine if she was physically able to perform her job duties.  The test was used by the company primarily as part of the pre-employment screening process.  The day after being released by her doctor to return to work, Merritt took the company’s fitness test.  Merritt had trouble with several components of the test, none of which were related to her injury according to Merritt.  Merritt received a failing grade for the test.  Stoddard then terminated Merritt’s employment for “inability to perform job.”  Merritt was then replaced with male drivers.

After her termination, Merritt brought a Title VII sex discrimination suit against Old Dominion, alleging that she was terminated because of the company’s “discriminatory belief that women were incapable of performing the duties of her position.”  Old Dominion countered that Merritt had been terminated after failing the physical ability test.  The district court granted Old Dominion’s motion for summary judgment, finding that Merritt had failed to raise a triable issue of fact with respect to pretext because she had failed to provide any evidence that Stoddard harbored discriminatory animus. 

On appeal, the Fourth Circuit reversed the lower court’s grant of summary judgment, finding that Merritt had put forth sufficient evidence that Old Dominion’s proffered reason for her termination was false.  First, the court found that at the time of her termination, Merritt’s ankle injury had healed.  Second, the court stated that the test used by Old Dominion was a “general, full-body physical fitness test that not designed to test any body part in particular,” and that the parts of the test Merritt had trouble with were unrelated to her injury.  As a result, the court found that there was sufficient evidence from which a jury could conclude that the test was merely a pretext for discrimination.

Next, the court found that Merritt had also produced sufficient evidence of discriminatory intent by showing that Stoddard and Old Dominion had employed the test selectively.  Old Dominion argued that its termination decision was made “pursuant to a uniform and neutrally administered company policy.”  The company alleged that the test was required whenever an injured employee received a conditional release from his or her doctor.  The court found, however, that although the policy was gender-neutral on its face, there was evidence that in practice the policy was not uniformly implemented, or did not exist at all.  The court found significant the fact that employees were not aware of the policy, that the policy was not written down, and that the policy argument was brought up late in the course of litigation. Further, the court pointed out that Stoddard’s decision to give Merritt the test was made before she received a “trial basis” release from her doctor. 

The court went on to say that Merritt had produced sufficient evidence that Stoddard harbored discriminatory intent based on his decision to require Merritt to take the test but not requiring the same of similarly situated male employees.  The court pointed out that while a company is certainly free to employ a testing method to ensure that its employees are capable of performing their job duties, here Merritt had been performing her duties satisfactorily for months before she was injured.  The court explained that its holding was “not about infusing fear and trembling into a company’s every employment decision,” but that the evidence in this case, when looked at as a whole, precluded summary judgment for Old Dominion.  The court emphasized that although McDonnell Douglas is a useful framework for discrimination cases, the ultimate focus should always remain on whether the plaintiff was subject to intentional discrimination.

Contributed by Claudia L. Guzman

Worldwide Network Services, LLC (“WNS”), a minority-owned company, held a subcontract with DynCorp International, LLC (“DynCorp”) for government-related work in Iraq and Afghanistan.  The relationship between WNS and DynCorp began to deteriorate when DynCorp hired new executives for the company.  Shortly thereafter, DynCorp decided not to renew WNS’s contract and stopped payment on work that was already completed.  There was also evidence that DynCorp executives exhibited racial animus towards WNS owners.

WNS brought suit against DynCorp, alleging discrimination under § 1981 as well as tortious interference and breach of contract claims.  After a jury trial, WNS was awarded $3.42 million on the discrimination claim, $83,000 on the tortious interference claim, $1.3 million on the breach of contract claims, and $10 million in punitive damages. 

On appeal to the Fourth Circuit, DynCorp argued that the jury instruction on the discrimination claim and punitive damages was erroneous, and that certain evidence should have been admitted and other evidence excluded.  The court upheld the jury instruction on the discrimination claim, finding it was not an abuse of discretion.  The court also affirmed the district court’s denial of DynCorp’s Rule 50(b) motion on that claim, and upheld the district court’s ruling on the evidentiary issues.

With regard to the punitive damages award, the Fourth Circuit reviewed de novo the district court’s denial of DynCorp’s Rule 50(b) motion on this issue.  The court began its analysis by stating that a punitive damages award under § 1981 requires “evidence that the defendant acted in the face of a perceived risk that [its] decision would violate federal law.”  The court stated that after “combing the record,” it had found no evidence suggesting that DynCorp terminated WNS’s contract with the knowledge that its actions would be in violation of federal law.  Further, the court found that the lower court’s jury instruction on the punitive damages issue was erroneous.  The court stated that the instruction failed to define “malice” or “reckless indifference,” terms which a layperson could not have known pertained to DynCorp’s knowledge that it was violating a federal law.

David Stone was employed by Instrumentation Laboratory Company (“ILC”) as a Director of National Accounts.  For a period of six months starting in September 2005, Stone voiced concerns to management about deficient internal controls and unpaid administrative fees by the company.  Stone alleged that he was retaliated against for his complaints and eventually terminated in March 2006.  Stone filed a retaliation claim with the Occupational Safety and Health Administration (“OSHA”) pursuant to the Sarbanes-Oxley Act.  OSHA issued its preliminary findings more than 180 days after Stone had filed his claim.  Stone then objected to those findings and requested a hearing before an Administrative Law Judge (“ALJ”).  ILC filed a motion for summary judgment, which was subsequently granted.  Stone then petitioned the Administrative Review Board (“ARB”) for review of the ALJ’s decision.  Before briefs were due in the ARB appeal, Stone filed a notice seeking dismissal of the appeal in order to file a de novo action in federal court.  Once Stone filed the federal action, ARB dismissed the appeal for lack of jurisdiction.

ILC then filed a motion to dismiss the federal suit, which the district court granted based on principles of collateral estoppel, finding that the ALJ’s decision was a “final judgment on the merits.”  The district court stayed the proceedings and instructed the ARB to rule on the merits of Stone’s claim.  The ARB ultimately dismissed the claim for failure to prosecute and the district court entered a final judgment dismissing the case.  Stone appealed the dismissal of the district court case to the Fourth Circuit.

On appeal, Stone argued that the Sarbanes-Oxley Act’s provision governing whistleblower claims was unambiguous and that he was entitled to a de novo review in federal court because a final decision had not been reached within 180 days of the filing of his complaint.  ILC argued that the district court had the power to apply collateral estoppel to avoid re-litigation.  Applying principles of statutory construction, the Fourth Circuit stated that the Act’s provision governing de novo review was plain and unambiguous.  The court held that a final decision had not been reached within the required 180 days, and that Stone had properly exercised his rights to seek de novo review in district court.  The court stated that in dismissing the federal case, the district court had strayed from the statute’s plain meaning of providing complainants with the opportunity for de novo review, and that courts do not have “free rein” to apply preclusion principles if contrary to Congress’s intent.  The court further found that giving the statute such a literal interpretation did not lead to an “absurd result.”

Contributed by Claudia L. Guzman

Tiffanye Wesley had been a firefighter with the Arlington County Fire Department since 1994.  She applied for the position of Captain but was not promoted even though she had met all of the eligibility requirements and passed the written test.  In her suit against the county, she alleged that she had been discriminated against on the basis of her race and gender.  The district granted the county’s motion for summary judgment, stating that Wesley had not established a prima facie case of discrimination because she had not shown that she was qualified for the position. 

On appeal to the Fourth Circuit, the court found that Wesley had produced sufficient evidence that she was objectively qualified for the promotion.  The court pointed out that Wesley had passed the written test for the promotion on two different occasions, and she had been rated as “more than qualified” by the department.  The county argued that there were several other qualifications that Wesley had to have in order to be “qualified” for purposes of establishing her prima facie case.  The court disagreed and found that Wesley had met the minimum objective criteria for eligibility, and that the other qualifications argued by the county were at least partially duplicative of the requirements for taking the written test.  The court went on to state that Wesley “need not establish that she was the most qualified person for the position, only that she met the job requirements and thus was qualified for the position of Captain.” 

The court further concluded that Wesley had raised genuine issues of fact about whether the department’s reasons for failing to promote her were pretextual.  The court stated that the fact that the department cited certain “marginally relevant” qualifications as being very important while disregarding other seemingly more relevant ones, specifically all of the qualifications that Wesley possessed, raised a genuine question of fact as to what criteria actually went into play in making the promotion decision.  The court held that a reasonable jury could find that the department’s proffered reasons were mere pretext for discrimination.

In a separate dissent, former Chief Judge Wilkinson disagreed, noting that “[b]ecause the record in this case provides no reasonable basis to infer that the Department’s reasons for not promoting Wesley were false, much less that the actual reason was race or sex, her claims must fail.”

On the defendant’s motion to dismiss, the district court had dismissed all of the claims with the exception of the FLSA claim.  After a jury trial, a verdict was rendered in favor of the employer, and the plaintiff appealed.  On appeal, Harman argued that the district court had erred in dismissing her discrimination and retaliation claims. 

The court of appeals began its analysis by stating that the standard for surviving a motion to dismiss is to state a “plausible claim for relief that permits the court to infer more than the mere possibility of misconduct.”  The court found that the district court had properly dismissed Harman’s disparate treatment claims as she had alleged mere conclusory allegations that failed to establish that she suffered an adverse employment action.  The court held, however, that the district court had improperly dismissed the retaliation claims.  Although the court found that the complaint contained “numerous irrelevant allegations”, the court stated that Harman should have been allowed to amend her complaint with regards to the retaliation claims. 

The case is primarily of interest as an example of the court of appeals reversing a 12(b)(6) dismissal based on the Supreme Court’s decision in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007).  The case was the subject of Congressional hearings in December 2009 as the perception is that recent Supreme Court decisions have made it easier for the courts to dismiss civil rights cases at the pleadings stage.  Workplace Prof Blog has a short post on the hearings here.  Early commentary on the decision in 2007 asked whether the case sounded the “death-knell” for notice pleading in federal court.

The plaintiff, Dean Inman, was fired from his job as Vice President of Technology at Klockner Pentaplast of America, Inc. (“KPA”), where he had worked for 17 years.  At the time of his termination, Inman was 58 years old.  Two years before his termination, Inman had received some less than favorable performance evaluations from his supervisor.  The supervisor had also requested Inman to create a development plan for his department, which Inman had refused to do.  According to the supervisor, in the months leading up to his termination, Inman had exhibited “unprofessional” conduct, including expressing displeasure to the human resources department about having to attend a mandatory training session and having to sign a non-compete agreement that everyone in his department was required to sign.  The supervisor also alleged that Inman had complained to a co-worker about the company’s decision to enact a salary freeze and then lied to the supervisor and said that he was in favor of the decision.

During the termination meeting, the supervisor allegedly told Inman that KPA need a “more energetic person” for such a leadership position, and that Inman “did not fit the ‘profile’ or ‘model’ ” of what was needed “for the appearance of a revitalized company.”  Inman was replaced by the former Vice President of Operations, who was 45 years old.

Inman filed a lawsuit against KPA in federal district court alleging age discrimination, among other things.  The district court granted KPA’s motion for summary judgment on the age discrimination claim.  On appeal, the Fourth Circuit addressed two issues:  whether Inman was meeting KPA’s legitimate expectations under the third prong of the prima facie case of age discrimination, and whether Inman had presented sufficient evidence of pretext. 

KPA argued that Inman’s failure to create the development plan for his department, his refusal to support the salary freeze, and his unprofessional behavior towards the human resources department supported the conclusion that there was no genuine issue of material fact as to whether Inman had been meeting KPA’s legitimate expectations.  The court disagreed, stating that the fact that Inman had received bonuses every year, and had been praised by his supervisor just a few weeks before his termination, was some evidence that Inman had been meeting KPA’s legitimate expectations. 

The court also found that Inman had presented evidence that, if accepted by the jury, would contradict KPA’s main reason for the termination – that Inman was fired because he lied about supporting the salary freeze.  The court found relevant to the pretext determination the comments that the supervisor had made at the termination meeting about Inman not meeting the “model” or “profile” of the “energetic person” that KPA needed.  The court also pointed to some notes that the supervisor had made during a meeting with an outside consultant hired to review KPA’s operations.  During the meeting, the consultant suggested that KPA form a task force that consisted of “young, energetic, future people.”  The supervisor wrote down notes on a napkin during the meeting, including the phrase “young, energ[etic].”  KPA argued that the notes were merely what the consultant was saying, and that the consultant was not the decisionmaker with regards to Inman’s employment.  The court rejected that argument, stating that even though the consultant was not the decisionmaker, the supervisor was, and the supervisor had found the consultant’s reference to “young employees” significant enough to write it down.  The court held that it was up to the jury to determine what meaning the supervisor attached to those words and whether he adopted the consultant’s suggestions.

Read more about this case on VLW.

The EEOC alleged that plaintiff, an African-American female, was subjected to a hostile work environment based on her gender and race and constructively discharged by her former employer, Central Wholesalers, Inc.  Plaintiff experienced racial and gender epithets from four white male co-workers over a period of two months.  These came in several forms including daily use of obscene and offensive language, workplace viewing of pornography (in magazines, calendars, video, posters, and screensavers), and sexual jokes.  More than once, Medley reported her observations to her supervisor and there was no effect.  The problem persisted even after Central’s President was notified and he held meetings with staff and walked around the work areas to observe the environment.

The district court granted Central’s motion for summary judgment and denied its motion for attorneys’ fees while awarding it costs associated with certain depositions.  On appeal, the Fourth Circuit reviewed the judgment de novo, in the light most favorable to the EEOC.  In order for a reversal of the district court, the EEOC was required to establish that the evidence viewed in its favor “would allow a reasonable jury to conclude that the harassment was (1) unwelcome, (2) based on Medley’s gender or race, (3) sufficiently severe or pervasive to alter the conditions of her employment and create an abusive atmosphere, and (4) imputable to Central.”

The EEOC established all four elements, leading to a reversal of the district court.  First, the court found that the gender and race based harassment was unwelcome because plaintiff complained about both types of harassment to her co-workers, supervisors, and Central’s President.  She told them she found both types objectionable.  Second, several incidents indicated the gender and race based nature of the harassment.  One or more of Medley’s co-workers used the word b***h on a regular basis, had Playboy items around the office, and watched pornography in her presence such that she could hear the sounds of sex from her cubicle.  Furthermore, they used the word n****r in her presence on a regular basis, while two workers in particular kept “blue colored mop-head dolls in their offices and had the dolls hanging from nooses which were tied around the dolls’ necks.”  Third, the court concluded that the circumstances met both the subjective and objective inquiries of the severe or pervasive test.  Finally, they held there was a basis for imposing liability because Central knew “but did not ‘respond with remedial action reasonably calculated to end the harassment.’”

Delving more deeply into the final point, the court highlighted several instances when Central tried to address to the issue and proved ineffective.  They noted that Central could have terminated, demoted, suspended, or reduced the pay of the workers in question.  For instance, the pornographic screensaver was not removed for over a week and a half after the complaint.  Medley’s supervisor did not take any action on the initial complaints about co-workers using the word n****r.  Central took no action to address the report of the blue dolls hanging by a noose.  Central’s President also took no action in response to the use of the word n****r other than mentioning generally that the company would not tolerate racial slurs, as part of a meeting held to address profanity.  Lastly, the court noticed that the “nature of the harassment experienced by [plaintiff] also became more severe in some respects after she started complaining” and reporting the incidents as the anti-harassment policy suggested.

Contributed by K.C. Osuji

In this appeal, Fred Ladd, a civilian water and sewer engineer, was hired by the Research Triangle Institute (RTI) to perform reconstruction services in Iraq following the 2003 U.S. invasion.  RTI contracted with the United States Agency for International Development (USAID).  RTI also subcontracted with Chemonics International Inc., Ladd’s direct employer.  Ladd sued RTI after he suffered serious injuries from a road accident in October 2003.  He alleged RTI failed to supply vehicles for operations in Iraq consistent with those promised during orientation.  Ladd further alleged negligence by the RTI driver and the defective condition of the car.

The district court awarded RTI summary judgment, finding that Ladd was a statutory employee of RTI under the borrowed servant doctrine and holding that his suit was barred under the Defense Base Act, 42 U.S.C. § 1651 (DBA).  On appeal, the Fourth Circuit reviewed the summary judgment de novo.  Ladds argued that the lower court erred in applying the borrowed servant doctrine to conclude that Ladd was a statutory employee of RTI under DBA.

Relying on their precedent in White v. Bethlehem Steel Corp., 222 F.3d 146 (4th Cir. 2000) and Supreme Court precedent in Standard Oil Co. v. Anderson, 212 U.S. 215, 220 (1990), the Fourth Circuit found that Ladd was a borrowed servant, and as such, barred by the DBA.  Therefore, they affirmed the lower court.  Specifically, they reasoned that the DBA applied to injury or death of any employee engaged in any employment under a contract with the U.S., where such contract is performed outside the U.S. 

The borrowed servant doctrine provides immunity from suit to an employee’s general or contract employer, as well as other employers who “borrow” a servant from that employer.  In determining who qualifies as a borrowed servant, the court stressed the importance of ascertaining who the work is performed for, and who has the power to control and direct the servants in the performance of their work.  The Supreme Court precedent highlighted an additional difference between authoritative direction and control versus mere suggestion as to details. 

RTI’s control over Ladd was evident in several ways.  First, he reported directly to RTI’s Chief of Party, who monitored his performance under the terms of his contract.  Second, his salary was subject to RTI approval.  Third, RTI had the power to terminate Ladd’s employment, amend his duties, or transfer him to different parts of Iraq.  Finally, Ladd admitted in his deposition, that on the day of his accident, it was RTI that ordered and arranged the trip.  These factors sufficiently established the authoritative direction and control.  Therefore, as a borrowed servant, “Ladd was a statutory employee of RTI under the LHCWA and the DBA.  Accordingly, the Ladds’ suit is barred by the DBA as a matter of law and we affirm the judgment of the district court.”

Contributed by K.C. Osuji

The facts revealed that Anthony was an excellent warden at Lee Correctional Institution, a maximum security prison, from 1999 until 2004.  He received many favorable reviews and was named Warden of the Year in 2002.  In that same year, defendant Ward became his supervisor.  He did not receive any evaluations from that point onwards.  The defendants’ dislike of plaintiff stemmed from two separate incidents involving Anthony’s input as the warden of Lee.

The first incident involved a hostage situation at Lee in late October 2003.  Laurie Bessinger worked as the Director of Security and Training at SCDC.  Bessinger was passed over for the position of Director of Operations, currently held by Ward.  At once, Bessinger had a bad relationship with Sheppard, his direct supervisor.  Both defendants criticized Bessinger’s handling of the hostage incident and even suggested his termination.  Anthony submitted a draft report to Ward, detailing the events that transpired on the night of the hostage situation.  After reading Anthony’s report, Ward asked Anthony to blackmail Bessinger in the report by adding negative and untrue details.  Anthony refused and his relationship with Ward changed.

The second incident involved Anthony and Sheppard, the co-defendant.  There was a surprise inspection (“shakedown”) of the Kershaw Correctional Institution, where Rickie Harrison (an African-American) was employed as warden.  In Harrison’s eighteen years of experience, this was the only shakedown he experienced without a prior notification.  Sheppard directly participated in the inspection and after interviewing Harrison, recommended his termination.  Following Harrison’s demotion, Sheppard chose to act both as the lead investigator in the Harrison grievance and the lawyer for the SCDC at the grievance hearing.  Sheppard subpoenaed Anthony for testimony at the grievance hearing, but declined to call Anthony as a witness because Anthony believed Harrison was the victim of racial discrimination.

These relationships appeared to factor into an unannounced shakedown of the Lee Correctional Institution, where Anthony worked as warden.  From the early months of 2003 until the shakedown in January 2004, Sheppard employed an investigator who reported directly to him from Lee.  Anthony was not made aware of the nature of the investigator’s duties.  As part of the unannounced shakedown, the boiler room at Lee was inspected. Ward participated directly in the inspection.  Sheppard and Ward classified as contraband, items found in the boiler room, including computer parts, bulk food items, and televisions.  They also noted other “irregularities” including inmates working without supervision, possible access to outside phone lines and the internet, as well as video surveillance of entry and exit from the boiler room.

Anthony inspected the boiler room regularly and was separated from the daily boiler room activities by four levels of supervision below him.  In the past, he was never linked to problems in the boiler room.  Furthermore, memoranda posted on the boiler room walls authorized inmates to work in the room with minimal supervision in circumstances requiring the officer to attend to business outside the room.

A June 2004 letter from his direct supervisor charged Anthony with gross negligence and falsification of documents.  These allegations surfaced in spite of assurances from Ward that Anthony was clear of any wrongdoing.  After pleading his case with Ward, Sheppard, and his supervisor, Anthony was informed that if he had not previously pursued the early retirement option in April 2004, he would have faced outright termination.

These facts led Anthony to file an action with the federal district court of South Carolina alleging that Ward and Sheppard conspired to force him out of his job at Lee.  After trial, the jury returned a verdict in SCDC’s favor on the Title VII discrimination claim and in Anthony’s favor on the civil conspiracy claim.  The jury awarded $510,000 in damages to Anthony and against Ward and Sheppard in their individual capacities.

On appeal to the Fourth Circuit, the court found sufficient evidence was presented for the jury to find that defendants conspired to bring about the forced retirement of Anthony.  The court opinion noted three important facts.  First, Sheppard deviated from Department custom by personally serving as both investigator and lawyer in Harrison’s grievance hearing.  Second, Ward admitted deviating from SCDC policy by failing to inform Anthony of the inspection at Lee and participating directly in it.  Third, SCDC’s Human Resources Director and Warden Harrison each testified that neither had seen a warden terminated for an inspection-related issue, failure to make inspections, or contraband found in an institution (absent the warden’s direct involvement).

These three factors are a stark reminder to employers of the important of following existing policies and applying them consistenly.

Contributed by K.C. Osuji

Although this was not an EPLI case, it is a good reminder to employers to check for any applicable insurance coverage after any workplace “claim” arises.  If there is an arguable basis for coverage, the employer should place the carrier on notice of the claim to protect its rights under the policy.

The Fourth Circuit reversed the district court’s interpretation that the 90-day period began running from the conclusion of an initial appeal, regardless of whether the employee timely files a motion for reconsideration.  Looking at prior judicial interpretation of the regulation, a notice from EEOC to the plaintiff Phillip Cochran, and Supreme Court precedent, the court reversed the prior decision.  The court held instead that a timely motion for reconsideration delays the running of the 90-day limitation period until the EEOC ruled on the reconsideration motion.

The Fourth Circuit looked back at two amendments of EEOC regulations in 1987 and 1999 affecting the definition of “final” as used in § 2000e-16(c).  In 1987, the definition changed in a few important respects: 1) under 29 C.F.R. § 1614.407(b), an employee was limited to one request for reconsideration, filed within 30 days of the original EEOC decision, and 2) under 29 C.F.R. § 1614.405(b), the EEOC issued an explicit definition of “final” under § 2000e-16(c).  That definition made a decision by the Office of Federal Operations (OFO) final for limitations purposes unless a) either party files a timely motion for reconsideration or b) the Commission on its own reconsiders the case.  In 1999, another amendment to EEOC regulations limited reconsideration of cases involving “a clearly erroneous interpretation of material fact or law” or a “substantial impact” on the agency.  The definition of “final” here stated that a decision issued by the OFO is final unless the Commission reconsiders the case and a “party may request reconsideration within 30 days of receipt of [the decision].”  The EEOC retained this definition.

The court also revisited Supreme Court precedent from Stone v. INS and ICC v. Bhd. Of Locomotive Engineers.  In Locomotive Engineers, the Court held that filing a motion for reconsideration delays the finality of an agency decision under the Hobbs Act.  This decision came regardless of statutory language suggesting that motions for reconsideration do not affect the limitations period for judicial review.  They relied on how similar language in the Administrative Procedure Act (APA) has been construed, such that parties are relieved from the requirement of petitioning for rehearing before seeking judicial review.  In the more recent case, Stone, the Court concluded that the APA’s a “tolling rule,” allowing the timely filing of a motion for reconsideration, renders an underlying agency’s order nonfinal for judicial review purposes.  It is important to note that Stone was especially relevant because the Supreme Court rejected the Government’s anti-tolling argument even with its strong support by regulatory language.  Comparing 8 C.F.R. § 243.1 (1990) with 29 C.F.R. § 1614.405(b) (2008), there’s a clear difference.  The former states: “The agency’s order becomes final upon dismissal of an appeal by the agency,” and the latter, “A decision issued by the EEOC on appeal is final under § 2000e-16 unless the Commission reconsiders the case.”

Finally, the court gave three additional reasons for its interpretation of § 1614.405(b).  These include prior district and appellate court opinions, a notice provided by EEOC to Cochran (similar to that provided to other aggrieved employees), and policy considerations.  From prior opinions, the court highlighted that all six federal appellate courts addressing the question presented here concluded that “a timely motion to reopen or reconsider delays the start of § 2000e-16(c)’s limitations period.”  Next, the notice sent by the EEOC notified Cochran that he had the right to file suit in a district court “within ninety (90) calendar days from the date that you receive this decision.”  Lastly, several policy considerations contribute to the court’s interpretation of § 1614.405(b)-including procedural fairness to parties, judicial efficiency, and maintaining an interpretation consistent with other similar legal contexts (to avoid confusion by litigants).

Contributed by K.C. Osuji